Governance of Swiss companies is increasingly shaped by international investors. And: Sustained criticism on pay for performance disclosure
A majority of Swiss institutional investors sees little value in exercising voting rights at shareholder meetings and does not participate in engagements with issuers – the opposite is true for international institutional investors who increasingly influence the governance of Swiss companies. This is one of the headline findings of SWIPRA’s Corporate Governance Survey 2016. The majority of investors further continues to perceive executive compensation as not reasonably aligned with achieved performance. This perception may be driven by insufficient disclosure: Less than one tenth of the investors are satisfied with the pay for performance disclosure. In addition, many institutional investors perceive the information on pay for performance in other countries as more substantial than in Switzerland, while a majority of Swiss issuers views Switzerland as a role model in this regard.
Limited benefits but substantial efforts with executive compensation votes – Disagreement over the value of shareholder voting rights
Efforts related to shareholder votes on management compensation agenda items are considered disproportionate compared to their value relevance. This is a finding of the third corporate governance survey conducted by the Swiss proxy advisor SWIPRA. All surveyed groups – pension funds, Swiss and foreign institutional asset managers and all SPI® companies – do not perceive compensation related agenda items as the most important value driver for a company, while the analysis of these agenda items was particularly time-consuming during the 2015 general meeting season. Further important findings show that all participants are in general critical with respect to additional regulation concerning corporate governance. A disagreement regarding the value of shareholder voting rights exists: Unlike institutional asset managers, pension funds only see little value in exercising shareholder voting rights.
Issuers and Investors with diverging expectations
Swiss listed companies and institutional investors (pension funds and asset managers) approach the annual general meeting (AGM) season 2015 with partially diverging expectations. This is the main result of the second corporate governance study by SWIPRA, an independent Swiss proxy advisor.
SWIPRA launches Corporate Governance Survey 2013
SWIPRA is launching a new, yearly Corporate Governance Survey in Switzerland in collaboration with academic researchers of the Department of Banking and Finance of the University of Zurich. We invite institutional investors, in particular Swiss pension funds, investment foundations and fund managers, as well as Swiss companies listed on the SIX Swiss Exchange to participate in this survey. By this, it will be possible for the first time to collect the opinions from all major market participants on corporate governance and its regulation in Switzerland. SWIPRA intends to contribute with this survey to the discussion and developments in this field. The results from the survey will be presented each year ahead of the annual shareholder meetings season.